Please stand by. Good day everyone, and welcome to SiriusXM's Fourth Quarter and Full Year 2016 Earnings Results Conference Call. For opening remarks and introductions, I will turn the call over to Mr. Hooper Stevens, Vice President, Investor Relations and Finance. Please go ahead, sir.

Thank you, Debbie, and good morning, everyone. Welcome to SiriusXM's fourth quarter 2016 earnings conference call. Today, Jim Meyer, our Chief Executive Officer will be joined by David Frear, our Senior Executive Vice President and Chief Financial Officer. At the conclusion of our prepared remarks, management will be glad to take your questions. We will also be joined by Scott Greenstein, our President and Chief Content Officer, who will be available for the Q&A portion of the call. First, I would like to remind everyone that certain statements made during the call might be forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These and all forward-looking statements are based on management's current beliefs and expectations and necessarily depend upon assumptions, data, or methods that may be incorrect or imprecise. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. For more information about these risks and uncertainties, please view SiriusXM's SEC filings. We advise listeners not to rely unduly on forward-looking statements and disclaim any intent or obligation to update them. As we begin, I would like to advise our listeners that today's results will include discussions about both actual and adjusted results. All discussions of adjusted operating results exclude the effects of stock-based compensation. With that, I'll hand the call over to Jim Meyer.

Thanks, Hooper. Good morning. The game remains the same at SiriusXM. Start with a great business plan, execute it well, generate lots of cash and invest and deploy that cash wisely to the benefits of our shareholders. SiriusXM delivered across the board in 2016, setting records for subscribers, revenue, adjusted EBITDA and free cash flow. More than 31 million subscribers, more than $5 billion of revenue and our highest ever adjusted EBITDA and free cash flow. Our track record of delivering what we tell you remains strong as we also beat all of our 2016 guidance on each of these metrics. The $1.66 million net self-pay subscribers we added last year was 18% above our original guidance and the 1.75 million total subscriber gain was 25% above our January 2016 guidance. Thanks to our excellent churn performance and strong sales of SiriusXM equipped automobiles. More people than ever are enjoying SiriusXM's unique and easy-to-use content bundle. The $1.88 billion in adjusted EBITDA we reported represents a margin of 37.3%, a record high full-year number and 80% of that adjusted EBITDA converted to a record of $1.51 billion of free cash flow. Our churn was just under 1.9%. We think the strong retention performance is remarkable given the significant and growing amount of vehicle turnover we naturally pick up as our business grows and matures. All of this should tell you that consumer demand for our business remains healthy and our team at SiriusXM is clearly continuing its excellent operational track record. Indeed, we are encouraged by the strong demand for our service, and we expect more of the same in 2017. The economy is humming along. Housing starts were up 5% in 2016 to a nine-year high while the unemployment rate sits at a healthy 4.7%, also the best in…

Thanks, Jim. Good morning, everyone, and thanks for joining us today. SiriusXM finished an excellent year in 2016 with strong performance and we have guidance for continued strong performance in 2017. So, let's give our performance a little perspective. Over the last four years of steady, but relatively slow U.S. GDP growth, smartphones have grown from 120 million to over 200 million, monthly online radio listeners have grown from 106 million to 155 million, paid streaming subscriptions have grown from 3 million to 20 million and over 200 million continue to listen to AM and FM radio. We live in a very competitive audio entertainment world and we like to compete. In the same four-year period, our subscribers are up 31%, revenue is up 47%, adjusted EBITDA margin has expanded by more than 10 points, adjusted EBITDA has more than doubled, and free cash flow is up 113%, that's also more than double, and we did it on a share base that has shrunk 28% through the repurchase of 2.2 billion shares and we're proud of that record. We started this year, 2016, by reaching 30 million subscribers in the first quarter and the by the end of the year, we added 1.75 million net new subscribers to bring our total sub base to 31.3 million. Self-pay net sub adds for the year were 1.66 million, taking us to just a shade under 26 million self-paying subscribers. Auto sales were essentially flat in the U.S. last year at a pretty robust 17.4 million. But as our full year new car penetration rate increased to 75% from 74% in 2015, sales of SiriusXM-enabled new cars grew 2% and our installed base of vehicles grew 15% to approximately 94.5 million. Used vehicle trial starts were up 22% for the full year 2016…

Thank you. We'll go first today to Barton Crockett with FBR Capital Markets. Barton E. Crockett - FBR Capital Markets & Co.: Okay. Great. Thanks for taking the question. I was very interested if you could give us any update on how you think the Canadian satellite radio transaction could affect your income statement. I think in the past when you were early in the process, you talked about maybe a 100 basis point lift to margins from a renegotiated royalty. Now that we've gone down this road, can you give us any update on how it could affect the P&L?

Yeah. I think we have incorporated into our guidance an assumption of the negotiated economics with Canada in the $2.025 billion of adjusted EBITDA. You'll see most of the results come through the other revenue line. And so, what I can tell you is that it's baked into the guidance. Barton E. Crockett - FBR Capital Markets & Co.: Okay. But will the accounting be the same? In other words, will you just get the other revenue in equity and joint venture, or is there some thoughts of consolidating here?

No. I think we mentioned on the last call that we won't be consolidating it. And so, the accounting will be the same. The renegotiated rates that underpin the agreement will, for the most part, show up in other revenue. And when we get there, we'll help walk everybody through where the changes show up. Barton E. Crockett - FBR Capital Markets & Co.: Okay. Great. And then stepping back a little bit, you guys have had this tremendous success in ramping up the used car free trial program. Could you give us a sense of what percentage of all the used cars that are sold with satellite radio now you think you guys are actually touching with a free trial or connecting with it in some way? I mean, is there much more room to go there? How much are you hitting?

From sales transactions reported directly to us, we're still in the sort of high 50s. I want to say like 56%, 57% probably. And then, we get title change information from other sources and we remarket to those. Our total touches probably get to about 80% of the SiriusXM enabled vehicles that turn over in the used car market. Barton E. Crockett - FBR Capital Markets & Co.: Okay. All right. That's great. Thank you for that.

We'll go next to Phil Cusick with JPMorgan.

Hi, guys. Thanks. Following up on Barton's question, can you talk about the health of auto sales in general, and then how many used car trials the company is expecting this year? Also, the historical correlation of new car sales to used turnover, if we saw new car volumes come down, would you expect that to impact the pace of turnover in used, and as well as the penetration increase? Thanks.

Yes, so I'll start with, I'm not a macroeconomist. I only see what I see for auto sales, although I do get the privilege of speaking with many, many auto executives and many, many different levels and at a lot of different venues. And as I said in my comments, and I put it in there deliberately, look, the amount of change coming out of Washington and what's going on out there right now, I think the word I used is dizzying, is probably being kind. Things are certainly in a great state of upheaval. But at its core, when you look at auto sales as we exited 2016, they were stronger than we expected as we exited the year. Inventory is a little high but all in all, we were very pleased. And we got the January numbers last night. We're digging through them, but our initial reaction also was those were consistent and actually a tiny bit better than what we expected in January. You couple that with the various conversations I've had with auto executives and all of us believe, at least collectively, that 2017 for auto sales is still looking around 17 million and that's a number we're basing our business on. There is 50 years of history that you can go and look up as to what happens to used car sales when new car sales drop and you can draw your own conclusion from that. Obviously, we would expect our penetration of used cars to continue no matter what happens to those overall sales and we'll see. But, at this point, we don't see the world falling apart.

Thanks, Jim.

Is there another question, operator?

We'll go next to Tom Eagan with Telsey Advisors.

Hi. This is actually Chris on for Tom. Thanks for taking our questions. First, could you just tell us the latest on the timing of the CRB proceedings? Is the hearing still in May with the decision by the end of the year? And then, what are the OpEx pluses and minuses that contribute to reaching the 40% longer-term EBITDA margin goal?

I'll take the second one first. We obviously don't give those in detail but I think when you run your models particularly the scalability of our declining SAC, coupled with the nature of how our expenses grow versus our versus growth leads us to be very comfortable in giving that projection as a margin we expect to get to. And I applaud you for the question. I should have included in my remarks that we absolutely believe and committed to getting to the 40% EBITDA margin. David, do you want to take CRB question?

Sure. The CRB, the hearing will be in April and under the statute, a decision due from the judges by December 15.

Okay. Great. And then just one final one, if I may. Could you just remind us on the satellite launches in 2019 and 2020? Are those still on track and how much will those contribute to CapEx in 2017, 2018, and 2019? Thanks.

So, the launches are still on track for 2019 and 2020. Just with respect to 2017, we're anticipating that satellite CapEx will probably be up about $50 million from where it is in 2016. And then, the balance of the programs will occur 2018, 2019, and 2020.

Okay. Great. Thank you.

We'll go next to Jason Bazinet with Citi.

Hi. Thanks. You talked about in your prepared remarks a lot of the changes that are going on both in terms of the connected car, but also growth in smartphones and streaming audio services. You've always been very disciplined when it comes to M&A. And I was just wondering, as the landscape sort of evolves beneath you, what would you say you sort of gleaned in terms of the changes in your thinking regarding M&A? The things that maybe were interesting a few years ago that fell by the wayside versus other things that might be more interesting as you watch the world change?

So, Jason, this is Jim. Let me make a few comments on that. First and foremost, I think we've been incredibly disciplined on not being distracted by shiny lights, and I would say that's at the core of what we do. We identified – jeez, it goes back – almost five years ago that the connected vehicle was a business that, at that time, as you remember, not many people were talking about and one that we expected would eventually grow to be a mammoth opportunity, and we made an acquisition, I think it's been over three years ago, of a leading provider of connected vehicle services with a company called Agero in Dallas.

Yeah.

And we've been very quietly and very consistently building and investing in that position and growing it. And what's proven to be right there is that the direction of that business is absolutely set. It's going to have a profound effect on automobiles, on automobile suppliers, and certainly, the users of those automobiles for easily the next 20 years. And so, I would tell you that we see that as a big opportunity evolving, and it's an area we're looking. It's gigantic. There are areas in there we don't belong in, but there are areas in there we continue to look at to find things, and I meant what I said, that are scalable, defensible and adjacent, meaning they require things and skills to be successful with them are things that we know how to do and complement what we do. And so, we're very focused in that area. Second, obviously, the growth of streaming is remarkable. I mean, just from the first paragraph of David's remarks.

Right.

I think he summed it up pretty succinctly about how much things have just grown in that area in the last three years or four years. I want to be clear. To be successful there, we don't need to acquire anything. I mean, we are investing a huge amount of money in both our streaming platforms, as well as the 360L platform to make sure that our customers will get a seamless experience which will allow them to have SiriusXM or allow them to listen to SiriusXM in any way they want to. And I think what we've learned is that while these technologies change and we all talk about it and write about them a lot, what usually ends up prevailing is the easiest one to use. And so, we're very, very focused on making sure our products evolve and continue to evolve in a very, very easy-to-use way.

Very helpful. Thank you.

We'll go next to Brandon Ross with BTIG.

Hi, guys. I have a couple of questions. First, following up on the streaming. At the Citi Conference, you guys sort of dispelled the idea of buying Pandora. Yet, your largest shareholder seems to be out there making his interest known. Can you reconcile that for us? Is there a disagreement on that between Liberty and Sirius? And then you've talked a lot about your efforts outside the car on this call and in mobile. Can you tell us the importance of the mobile funnel for acquiring new subscribers and where you see that going? Thanks.

The first question, I'll start with – number one, you obviously – I speak to Greg Maffei multiple times a week. You all can speak to him anyway anytime you want, but I can tell you, there's zero disagreement between Greg and myself on direction going forward on the asset you talked about, so – and second, I thought the comments that David made at the Citi Conference were right on point, and I really don't have anything to add there at all on that particular point. Second, and I want to clarify here, I do see – I'm dealing with your second question now, I do see the mobile funnel certainly as an interesting thing, but I think where we're more focused on is having our subscribers listen to our service across multiple things. And so, we already have, if you think about it, we're getting, let's call it 20 million what I would call target-rich trials every year between our new car and our used car funnel that frankly, a small improvement in yield and a small improvement in our retention curves after the yield from those funnels would yield big subscriber gains. And so, our focus on streaming is more about enhancing the overall listening capability of our products, not necessarily saying, well, let's just go after customers who only want to listen on their mobile phone. That said, we offered a day a mobile-only plan and you'll see us experimenting with more and more over that over the next months and years to come.

Can you just size that mobile-only sub base?

I don't really have much to add there. I'm sorry. I don't – I can't. Not right now.

Okay. Thank you.

We'll go next to Ben Swinburne with Morgan Stanley. Benjamin Daniel Swinburne - Morgan Stanley & Co. LLC: Thanks. Good morning, guys. Couple for David first. David, CapEx for 2017 should that $50 million increase in satellite CapEx. Is that a good sort of suggestion for the overall year-over-year change in capital spending 2016 to 2017? And then, I was just curious if you expect that 75% radio penetration rate to grow much. Is there an opportunity to take that higher? Every basis point helps, so just wanted to see if we could revisit that as well. And then, I had a question for Jim.

Okay. On CapEx, the non-satellite CapEx will grow a little bit as well, but most of the increase will be captured in the $50 million. The – on pen rate, pen rate at this point is – a lot of it is model mix, and what's selling. And with the gas prices lower and SUVs and crossover selling at pretty healthy rates, those are among the higher-penetrated cars. So, I think at this point, we continue to look at pen rate as being stable. And movements in it – while there are still some manufacturers who are increasing a little bit, for the most part, the movement in pen rate has more to do with model mix. Benjamin Daniel Swinburne - Morgan Stanley & Co. LLC: Got it. And then, Jim, just on 360L, now that it's sort of in the – we have a date for it to start, and I realize it will take a long time to get deployed across a meaningful number of vehicles, is there one or two things in that platform that you would point out as being most substantial to the business? Because when we – you know, we tested it a little bit at your Investor Day last November, and there's a lot of really interesting stuff there, both from a consumer experience perspective, but also sort of a customer care, marketing provision. I just want – was curious what you think and what the OEMs think that might be? The – what might have the biggest benefit for you as that gets deployed?

Yeah. I think from day one, we've tried to deal with that question across our organization by saying this just isn't a platform we're building to deliver a better product experience to our customers, but it's also a platform we're building to try to build a much better service experience to our customers and by that I mean significantly trying to knock down those impediments that might keep people from either starting their relationship with us or renewing their relationship with us. And so, as we've done it, we've tried to make dealing particularly in the area of renewal or choosing what plan you might want, very, very, very easy. And while we haven't – obviously we're still a year away from seeing this in production vehicles, I'm really encouraged by the field data we have going on right now, how easily people have grasped that concept and I'm really encouraged about what that could have for future value in our business. Second, let's face it, we have an overwhelming amount of content. I mean, we bring a ton of content and I'm always amazed when we talk to people who have left our service and we ask them why, some of them will say, well, you didn't really have what I was looking for and when you say, well, what were you looking for; and they say, and we say, well, did you know we had this and this, and they say, well no, I didn't know that. And so, the number one thing we can do to protect and keep our customers is engagement, engagement, engagement. And 360L has been built to try to drive engagement, but from an intuitive basis, to make it much easier to get further drawn into the Sirius experience and hopefully make our customers happier with what they're getting. So, I'm really encouraged about 360L. Trust me, Ben. I wish I could snap my fingers and make it go 10 times faster. I've tried. We keep working with the automakers about finding ways to do this and do that faster. I've been working here at Sirius now for almost 13 years and the one thing I've learned is the auto cycles are going to go at the speed they go. Benjamin Daniel Swinburne - Morgan Stanley & Co. LLC: Sure.

So, but I do believe 360L, both on the programming, the experience the subscriber gets as well as the way the subscriber deals with us, it will have a profound effect on both of those. Benjamin Daniel Swinburne - Morgan Stanley & Co. LLC: Got it. Could I just sneak one more in on M&A and strategy? You talked about adjacencies, Jim. And I think the thing, the deal I can think of historically that you've done that might give us some test case is the Agero deal. When you look back at that transaction and what you paid for it and the business plan, how would you assess it? How has that executed versus your expectations, and how might that guide us in thinking about what you may do next?

No, it's a very fair question. And I'll tell you, we're executing slower than what our business plan was. And we probably had to invest more in the business than we originally anticipated. That said, I can tell you we were having all kinds of conversations with the OEMs about wanting to have a position in the connected vehicle space four years ago. Once we owned the connected vehicle business, those conversations became real really, really quick. And so, the acquisition to me alone was worth it for the credibility and the skill set it gave us in that business for what we needed to be able to drive that business forward. Today, I'm really pleased with where that business is. It's taken longer than I would have liked, but a lot of that reason it's taken longer is we're now – and we've announced them all on our earnings curve, we're now so deeply built into many, many, many of the product development cycles of the OEMs for the connected vehicle, it just takes time. And we can now see it. We can't predict what auto sales will be in 2019, but we do know what percent of the vehicles will be with our connected vehicle services, and we really like our position. Benjamin Daniel Swinburne - Morgan Stanley & Co. LLC: Thanks a lot.

We'll go next to Jessica Reif Cohen with Bank of America Merrill Lynch.

Thanks. Jim, one more question on the connected car. When you were speaking in the prepared remarks, you talked about the global revenue opportunity and global OEM production. Is there a change of heart here? Are you considering any kind of geographic expansion?

That's a good question. It's an interesting question, and I think that when you talk to the – for sure, one thing that's occurred with the OEMs I think very clearly in the last five to eight years is every one of them has become globally focused as opposed to only North American or Europe or Asian focused. And so, in many areas, they look for platforms that they can use on a global basis. As we study the changes that are coming in the connected vehicle, we see opportunities in that space that are global in nature. Where we want to be careful is we want to be sure that if get into those businesses on a global basis – by the way, I want to clear, Jessica – this is different than our audio business, okay. But that if we get into those businesses, they're in areas where we can add value and ultimately we can make money. But I will also tell you the automaker is looking for global partners in those areas as well. And so, we'll see. We'll see as we move forward. I want to be clear. Being in those business globally doesn't scare me. There isn't a skill there that we can't master. I think, it's a matter of making sure that if we go into those on a global basis, we can money at it.

Okay. You said different than the audio business, which I guess...

We have no plan to take satellite radio beyond North America.

Okay. But, okay. But I think you guys said that Scott would be on the call as well.

Yeah.

And you haven't mentioned anything since announcing about the video rollout initially with Howard Stern. Is there anything you can say about it now?

Scott, you want to take that?

Sure. Where we are in the video, just to have that as background? When the deal was – the overall deal with Howard was originally done and video was a component, as we can tell from this call with connected car and everything else, one of the things Jim and I wanted to make sure were those rights from video couldn't be turned into any sort of Bluetooth or connected car audio given the relatively static nature of the show and the set and everything else. So, we started with that premise. Once we tied that up, we then went to look at how can we turn this into both a creative exercise that would be interesting to our subscribers, as well as make sense economically. Given the bar of the creativity with Howard integrating the technology, so video will work in our app and all that goes with that. It's totally on plan right now where we're; and Whalerock and I are in daily conversation on reviewing creative and different elements that go with that, and there will be announcements coming over the next calendar – during this calendar year that will lead to the rollout, as Jim has said, but it's a creative process, and as anything we do, we want to make sure it's both correct. It's exciting and it breaks through, and that takes a little time. You can't speed that up any more than the process. And the great thing is that Howard is super engaged with this, and his creative mixed with Whalerock and our team, we feel pretty optimistic where we're going to end up on this.

And is there any thought of anything beyond doing something with Howard Stern or do you want to see how it works first? Can you just talk about your whole video thought process?

Well, for sure in 2017, our focus is to get Howard correct. But absolutely, it's funny we're engaging in a discussion this afternoon on that very question with someone who – the Whalerock team has already brought us a lot of other ideas. Again, here, Jessica, I don't think we're ever going to be in the standalone video business, that's not what we do. What we're trying to do here is we're trying to look for areas where video and that video experience very much complements what our subscribers are getting from SiriusXM. And in fact, would make them more sticky and more appreciative of our service in SiriusXM.

Exactly. And one final point on that is, often when any kind of video content is launched, whether it's free or pay or anything, there has to be a way to get to people that might care about that video. And sometimes, it can happen through marketing, other times, it's virally or accidently. In our case, as Jim said, it's likely to be in the early stages no different than Howard where there's an existing large or a passionate niche audience that already exists that might have an appetite for a complementary video portion of either that show or independent video that complements the audio and the brand.

And one – can I, just one last question for David. There was it seemed like unusual swings in the income statement for some of your costs. Programming costs were up a lot. G&A was down a lot. Is there anything we should take out of this going forward?

No. I don't think so, I mean, we do have some seasonality in the programming cost, and we've got I think a full year effect of NFL running through. There's a full year effect of other contracts running through in the fourth quarter as well. So, it got a little bit of an extra goose, but I don't think you should take anything special away from it. And G&A does tend to – does tend to bounce around a little bit that we can get heavy legal settlements or adjustment of bonus accruals that run through it. But nothing really special, Jessica.

Great. Thank you.

We'll take our next and final question today from Vijay Jayant with Evercore ISI.

Hi. It's James Ratcliffe for Vijay. A couple if I could. First of all, on the ARPU front, pretty solid trends the last few quarters. How much of that has been driven by the 2016 price increase and what share of customers still have – are on the prior plans, or those who are on the, I guess, Select and Family Select plans? And secondly, if auto sales are going to slow a little bit, what do you think the impact on conversion rate is? Is that last million units or so have a comparable conversion rate to the rest of SAR or is it potentially lower? Thanks.

You know, we don't – I don't think with the – especially the small magnitude of the slowing in auto sales, there isn't something that we'd change with conversion rates around that. On the ARPU front, what you're getting through there, because it does take about 18 months for a price increase to roll through the business that, you're getting the effective of, sort of – we keep saying that we tinker with the price grid all the time. So, you're getting multiple adjustments rolling through the price grid including changes to the music royalty field over the last couple years. So, it's sort of all varied. It does take a little while for it to work through. I would say that for me, ARPU was higher than I thought it would be in 2016. I don't think you'll see the same kind of increase running in 2017.

Great. Thank you.